Section 4.36.402(A) Limitation on allocations to participants.
Notwithstanding any other provisions of the plan:
A. Limitations applicable to participants in defined contribution plans only.
1. The annual additions, as defined in Internal Revenue Code Section 415(c)(2), credited to a participant’s accounts (exclusive of any amounts credited in accordance with Section 4.36.403) for any plan year commencing on or after January 1, 1988 shall not exceed the lesser of (a) $30,000 or such larger amount, as may be specified by the Secretary of Treasury or his delegate on account of increases in the cost of living as provided in Section 415(d) of the Internal Revenue Code of 1986 as amended (Code), or (b) 25% of the participant’s compensation (as defined in subsection D. for purposes of this section, and subsections B. and C. of this plan) for such year.
2. In the case of any participant who also participates in a related plan (such a plan shall mean any defined contribution plan (as defined in Section 415(k) of the Code), other than this plan, maintained by the employer, including, if applicable, after December 31, 1985 any welfare benefit fund that is defined in Section 419(e) of the Code), the sum of his annual addition under the plan and his annual addition under all related plans for any plan year commencing on or after January 1, 1988, shall not exceed the lesser of (a) the amount set forth in paragraph A, 1(a) above or (b) 25% of the sum of (1) the participant’s compensation for such year and (2) his remuneration for such year. The compensation limitation referred to in subparagraph (b) shall not apply to any contribution for medical benefits (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an annual addition under Section 415(l)(1) or Section 419A(d)(2) of the Code.
3. To the extent necessary to satisfy the limitations of paragraphs A, 1. and A, 2. above, the committee shall reduce the net contribution it would otherwise make for the participant’s benefit for the applicable plan year.
B. The combined limitations applicable to participants who also participate in a defined benefit plan are repealed effective for plan years beginning on and after January 1, 2000.
C. Adjustments on account of excessive credits. If it is determined at any time that the amount credited to a participant’s accounts for any prior plan year was in excess of the amount permitted under the limitations of subsection A. above, the committee shall charge against the participant’s accounts an amount or amounts (adjusted to reflect income, expenses, gain or loss of the trust properly attributable to the excess credit or credits) sufficient to permit the remaining credits for such prior year to satisfy the foregoing limitations and make adjustments in the order provided below.
To the extent the excessive credit was an excessive employer contribution as determined by the committee, such excessive portion, adjusted as aforesaid, shall be applied to reduce the first contribution or contributions thereafter to be made by the employer.
The charges and credits required by this subsection C. in any plan year shall be made prior to any other adjustments under Article IV as of the end of the plan year.
D. Code Section 415 compensation definition. Participant’s compensation for the purposes of this section shall mean a participant’s earned income, wages, salaries, bonuses and fees for professional services, and other amounts received for personal services actually rendered in the course of employment with the employer maintaining the plan and excluding the following:
1. Employer contributions to a plan of deferred compensation which are not included in the employee’s gross income for the taxable year in which contributed, or employer contributions under a simplified employee pension plan to the extent such contributions are deductible by the employee, or any distributions from a plan of deferred compensation;
2. Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by the employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
3. Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option;
4. Other amounts which received special tax benefits, or contributions made by the employer (whether or not under a salary reduction agreement) toward the purchase of an annuity described in Section 403(b) of the Code (whether or not the amounts are actually excludable from the gross income of the employee).
Notwithstanding the foregoing, for plan years beginning on and after January 1, 1998, compensation shall include any amount that would have been included in the foregoing description, but for the participant’s election to defer payment under Section 125, 402(e)(3), 402(h)(1)(B), 403(b), or 457(b) of the Code and certain contributions described in Section 414(h)(2) of the Code that are picked up by the employing unit and treated as employer contributions. Effective for plan years beginning on and after January 1, 2001, compensation shall also include any amount that is not included in the participant’s taxable gross income pursuant to Section 132(f) of the Code.
A participant’s compensation for any limitation year is the compensation actually paid or includable in gross income during such year. (Ord. 6747-NS § 1, 2003)